10 Jun 2013
Flash: US Employment data fails to impact on tapering debate - BBH
FXstreet.com (Barcelona) - Brown Brothers Harriman analysts note that the US employment data failed to have much impact on expectations regarding the timing of the Fed's tapering.
They note that a recent news wire poll found a median expectation for it to begin in October and by about $20 bln. Further, the key issue is whether the appreciation of this is sufficient to stabilize long-term US interest rates. They write, “It does not appear to be, which means, barring a significant surprise, US yields do not appear to have peaked yet. The 10-year yield can rise into the 2.25%-2.40% area. This need not be supportive of the dollar against the other major currencies, if it is part of a larger unwind of positioning.”
They note that a recent news wire poll found a median expectation for it to begin in October and by about $20 bln. Further, the key issue is whether the appreciation of this is sufficient to stabilize long-term US interest rates. They write, “It does not appear to be, which means, barring a significant surprise, US yields do not appear to have peaked yet. The 10-year yield can rise into the 2.25%-2.40% area. This need not be supportive of the dollar against the other major currencies, if it is part of a larger unwind of positioning.”